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So you want to be a social media star? What to know about the creator economy in 2024

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So you want to be a social media star? What to know about the creator economy in 2024

Half a trillion dollars. That’s how large the creator economy, currently pegged at $250 billion, is predicted to grow in the next four years, according to Goldman Sachs.

While people have been making a living off of creating content for online audiences for nearly two decades, what was once a nascent industry is growing up. Brands are getting more strategic about influencer marketing, a thriving ecosystem has emerged to serve creators and their needs, and social platforms are increasingly nudging consumers to spend while they scroll.

What does this mean for influencers and their audiences? The Times asked those who have been in the creator economy for decades to opine on what the new year will bring. We’re still in the early innings, they said, but in 2024, the industry will continue to mature in significant ways.

It will get tougher to build a ‘real’ business.

Most creators start off as one-man bands. They brainstorm, film, edit and post content on their own. Day by day, they grow their followings, and eventually begin to make money. But then what?

“There are two options: You either bring in a manager or agent externally, or you hire a COO or business partner internally,” said Jon Youshaei, a creator and founder of Youshaei Studios. “And more and more, I’m seeing creators bring in a right-hand person internally.”

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A lot of this has to do with competition. Although the barrier to entry has never been lower, building a “real business” in the creator economy is getting harder, Youshaei said.

Blake Michael, chief strategy officer of Fourteen Media Group, a consulting firm for creator economy startups, said this necessitates bringing in outsiders to help with growth strategies.

“Niche verticals are so quickly becoming saturated, and that means you’ve got to put more effort into your content to stand out,” Michael said.

Companies will be more selective about who they work with …

In the early days of influencer marketing, creators quickly attracted money and attention from companies clamoring to get in on social media. This year, businesses won’t be as willing to throw money at any influencer that comes their way.

“I just think they’re getting a lot smarter,” said Joe Gagliese, co-founder of Viral Nation, one of the world’s first influencer marketing agencies. “They want to understand: Does this person really align with my brand? What are their views and perspectives on things that might not align with my brand?”

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As brands become more disciplined in their efforts in 2024, they will increasingly want to see results they can measure, Gagliese said.

Two influencers who may look the same on paper might produce completely different results. Companies are learning to look at metrics such as community engagement over number of followers, and they’re scrutinizing the type of relationships creators have with their audience.

“There’s creators who people look to and trust for their opinion, and then there’s creators who folks like to be entertained by,” Gagliese said, “and those two types of engagement are very different as it relates to being able to help a brand.”

… But this could mean more opportunities for ‘micro influencers.’

Counterintuitively, the push to formalize channels of influencer marketing will mean more opportunities for creators with smaller followings.

Traditionally, several “inefficiencies” have slowed down the process when companies want to work with influencers, said Zach Ferraro, head of strategic partnerships at Fourthwall, a platform that helps creators sell products and launch memberships.

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First, brands had to look for the right creator — and often they didn’t know exactly what they were looking for or what to expect realistically in terms of outcomes, Ferraro said. They had to go back and forth with a manager on rates, which can vary widely, and provide deliverables, such as a certain number of Instagram posts or videos.

To make it worth the friction and costs involved, brands would look only to ink larger deals.

But as companies have become more experienced, platforms that connect creators with brands have proliferated and the process has become more transparent. For example, the company F*** You Pay Me, allows creators to anonymously review brands they’ve worked with and share how much they got paid.

“Smaller, mid-tier micro influencers are going to get more opportunities as friction goes down,” Ferraro said.

Gagliese of Viral Nation agrees.

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“I think that creators who have really developed core audiences and communities and have the ability to convert and create those business outcomes will likely get paid more,” he said. These are the influencers who might not have millions of followers but boast smaller, devoted audiences.

Another possibility is for brands to hire smaller creators for in-house content, Ferraro said. “Middle-class” creators who might not be doing as well financially as they want to be could find opportunities offering their expertise to brands looking to build their audiences.

Consumers will pay you for your content too.

With the advent of in-app “tipping” features on social platforms, creators have another way to make money: Their fans can pay them directly without going through a third-party platform, such as Patreon or Buy Me A Coffee.

On TikTok, users can purchase coins to spend on virtual gifts for livestreamers on the platform that can then be converted into earnings. The most popular form of spending is a $19.99 bundle of coins that makes up a quarter of the app’s in-app purchase revenue (TikTok takes 50% of the payout).

Lexi Sydow, head of insights at data.ai, said this is a compelling trend because they represent one-off micro-transactions given in the moment for specific creators that consumers enjoy.

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“There’s not necessarily a subscription tied to it,” Sydow said. “You’re saying, ‘Kudos. I like this. I want more of it.’ And I think that that’s powerful for this space because I really do believe we’re in the early days of the growth rates.”

In 2023, TikTok became the first non-game app to generate $10 billion in consumer spending, according to data.ai. This bodes well for social media spending overall, which is only projected to grow.

Other platforms such as Instagram and YouTube have also jumped on the bandwagon to introduce tipping features.

Authenticity will rule…

Eric Wei, co-founder of Karat, a startup that helps creators with their finances and credit, describes the current era of social media content as “sensationalist” — and predicts a trend toward authenticity in 2024.

Just take a look at the top subscribed YouTube channel by an individual, MrBeast, whose recent videos include “I Rescued 100 Abandoned Dogs!” and “$1 vs $100,000,000 Car!”

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Although MrBeast will continue to be popular, Wei predicts a movement of creators toward more unedited content. They include fitness YouTuber Sam Sulek, who has 2.75 million subscribers.

“Everyone’s focusing on Sam, why? The guy doesn’t edit,” Wei said. “It’s just him working out at the gym for over an hour.”

Youshaei, who also has a YouTube channel, said he sees the rise of this kind of content counteracting the “hyper-edited” videos that have taken over YouTube in recent years.

… But the rise of fake influencers is coming.

Lil Miquela, self-described as a “19-year-old Robot living in LA,” is one of the first virtual influencers. She charges up to hundreds of thousands of dollars for a deal and has worked with brands such as Burberry, Prada and Givenchy, the Financial Times reported recently.

She posts photos of herself vacationing in Europe, dyeing her hair at the salon and eating at taquerias. Does it matter that she’s not real? She has 2.6 million followers.

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Human influencers may soon have to worry about competition from such AI-generated avatars.

Digital avatars that amass followers is not a new idea. Consider Japanese Vocaloid Hatsune Miku and K/DA, a virtual K-pop girl group featuring League of Legends characters.

And Wei points to Iron Mouse, one of the most subscribed female creators on Twitch who uses a virtual avatar and is known as a VTuber.

“It’s already a billion dollar industry,” he said.

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Read Nick Bilton’s Letter to Scott Pelley

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Read Nick Bilton’s Letter to Scott Pelley

Dear Mr. Pelley:

I meant what I said in my letter last week to the 60 Minutes team: joining 60 Minutes is the honor of my career and I am grateful to be working alongside the people who have contributed to the most important television journalism brand this country has ever produced. While I’m new to 60 Minutes, I’ve devoted my career to investigative journalism and storytelling. I started this job excited to collaborate and to benefit from the wisdom and experience of the 60 Minutes veterans, with you among them. For that reason, one of the first things I did in my new role was call you to talk and invite you to dinner. It is a profound disappointment that you rejected that overture and chose ambush instead. Yesterday, you hijacked my first meeting with staff to disparage me, my qualifications, and my intentions with remarkable incivility and contempt. I welcome a diversity of viewpoints and respectful debate among the team, but this was nothing of the sort. Yesterday’s performative display of hostility enacted in front of the staff instead of in a civil, private conversation-demonstrated that you have no interest in contributing to the future success of the show, or approaching my new tenure with a mind open to collaboration and progress. I am here to deliver first-in-class news programming, not to make headlines about newsroom drama. I am eager to work alongside those who share this goal.

Despite yesterday’s misconduct, I had hoped that in sitting down with you today we could find a path forward together. You made clear that you are not interested in such a path.

Your antipathy to the future of the show has come through loud and clear. And I have heard you. I therefore write on behalf of CBS News, Inc. (“CBS”) to inform you that your employment with CBS is terminated for cause effective immediately. Enclosed is your formal termination letter.

Sincerely,

Nick Bilton

Executive Producer, 60 Minutes

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Aspiration co-founder sentenced to 14 years for fraud

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Aspiration co-founder sentenced to 14 years for fraud

The co-founder of Aspiration, Joseph Sanberg, was sentenced to 14 years in prison on Monday after defrauding investors and lenders of over $248 million.

The startup, an eco-friendly digital banking company boasting fossil fuel-free investments, carbon offsets for gas purchases, and a debit card with cash-back benefits for shopping at clean companies, was founded by Sanberg and Andrei Cherny. Cherny left the company in 2022 and has not been charged.

Sanberg, an Orange County native, pleaded guilty to wire fraud in October after being arrested in March last year. Aspiration subsequently filed for bankruptcy and liquidated all of its assets by July.

Sanberg and venture capitalist Ibrahim AlHusseini, who also faces charges, together forged a series of bank statements in order to obtain loans. From 2020 to 2021, the pair forged AlHusseini’s bank statements to show millions of dollars in assets in order to obtain millions of dollars from lenders.

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Additionally, they forged a letter from their audit committee stating that $250 million in funds were available, when in reality Aspiration had less than $1 million. The amount of loans defrauded exceeded $248 million.

In 2021, Sanberg artificially inflated Aspiration’s 2021 revenue by $44 million by recruiting 27 fake customers to sign letters of intent pledging tens of thousands of dollars per month for tree planting services. Sanberg himself funded the contracts and used the inflated revenue numbers to obtain more loans.

The charges sparked an NBA investigation into salary cap allegations due to Aspiration’s connections with Clippers owner Steve Ballmer.

Ballmer personally invested $60 million in Aspiration, all of which was lost. He is now the target of a civil lawsuit alleging his participation in the scheme. Ballmer denies the allegations.

The team announced a $300-million sponsorship deal with Aspiration, and Clippers player Kawhi Leonard signed a four-year, $28-million marketing contract with the company, which reportedly performed no duties. The issue has raised concerns about how players are circumventing the NBA’s salary cap.

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The team lost the $300-million sponsorship deal and an additional $20 million paid for carbon offset purchases.

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Monterey Park takes landmark vote on banning data centers

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Monterey Park takes landmark vote on banning data centers

Residents in the city of Monterey Park will be the first in the nation to vote on a permanent ban on data centers Tuesday.

If approved, Measure NDC would prohibit data centers within the city limits and could only be overturned by another vote.

Yard signs saying “No Data Center” in English and Chinese with images of dragons line sidewalks in the San Gabriel Valley city.

As a wave of data center opposition sweeps the country, numerous towns and counties across the U.S. have instituted temporary moratoria and other restrictions on the facilities. But only a handful have instituted indefinite bans, and just four other towns have sent related matters to the ballot.

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Supporters are hoping the vote will set a precedent for the rest of the region, where residents are fighting proposals in Vernon and City of Industry.

“This is about as permanent a ban as we can get,” said Steven Kung, co-founder of the group No Data Center Monterey Park. “Winning Measure NDC would send a huge message to the rest of the San Gabriel Valley about how residents don’t want data centers.”

The ballot measure emerged from the fight against a 247,000-square-foot center proposed in 2024 by the Australian-owned investment firm HMC StratCap for a residential area in Monterey Park.

The facility would have sat less than 500 feet away from the nearest home and used three times the electricity of the 60,000-person, predominantly Asian American city.

While the developer touted the potential for jobs and tax revenue, residents expressed concerns about noise and air pollution, rising electricity rates and a potential to lower property values.

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The company pulled its plans in late March following public outcry and a March 4 city council vote to extend a temporary data center moratorium and place a ban on Tuesday’s ballot.

In a letter to the city council, HMC StratCap said it would pursue a different use for the land and would not engage in a ballot measure fight.

The city council later banned data centers indefinitely, the first in California to do so, said Mayor Elizabeth Yang. But she’s still been out campaigning for the measure with all four other council members.

“If a council puts in an ordinance, a future council can reverse it too,” said Yang. “With the ballot measure, unbanning it is a lot harder because you need the entire city to vote on it.”

The measure proposes the ban “to protect air quality, drinking water resources, and public health” and “prevent impacts to electricity and water rates.”

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While California places third in the country for existing data centers with about 300 facilities, it hasn’t been a hot spot in the recent AI-driven data center boom. High electricity rates, expensive land and regulatory hurdles mean that fewer, and smaller, facilities are currently planned than in Virginia, Texas, Georgia, Illinois or Arizona.

“Most of California’s data centers are small by today’s standards,” said Shaolei Ren, an engineering professor at UC Riverside who studies how to reduce the environmental impacts of data centers. “Ten years ago, they would be medium-sized, but the power demand for new AI data centers has increased a lot.”

The average operating data center demands 45 megawatts, according to the Washington Post, while the average planned one would draw 430 MW. The one proposed for Monterey Park would have required about 50 MW at peak demand.

As proposals crop up in SoCal, they’re met with fierce opposition. Montebello, El Monte and Baldwin Park have all enacted temporary moratoria, and Alhambra recently banned data centers as part of a zoning code update. City of Industry, Vernon, City of Commerce and Santa Fe Springs are moving in the other direction, trying to court developers and streamline data center approvals. Community groups are fighting that.

Outside the San Gabriel Valley, residents of Coachella and Imperial County are showing up in droves to protest local proposals.

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Matthew Shaw, a volunteer with the Coalition for Responsible Data Center Development, who recently published a report on opposition to AI data centers, said a vote to ban them in Monterey Park “would lead to copycats, partially because so many groups are just opposed to any data center development at all.”

While there is no formal opposition to Measure NDC, some building trades like Ironworker Local 433 supported the Monterey Park data center when it was still live before city council. Those in the data center industry are lamenting the state of public opinion.

“These are multi-billion-dollar assets that are built by multi-trillion-dollar companies. These things will get done,” said Mehdi Paryavi, chairman of the International Data Center Authority. “My biggest problem is that our industry does not invest enough in community engagement.”

Paryavi said towns that seek to limit data centers are missing out on thousands of jobs generated by data center construction, operations and customers, as well as faster artificial intelligence speeds and better performance.

Kung said local community organizers are “looking at the empirical evidence” and seeing a ban as a win.

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“We’ve never seen a city that embraces a data center and is like, ‘Look how our quality of life has increased, look how all the revenue has gone into citywide improvements,’” he said. “That just doesn’t exist.”

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